Stock Market & Financial Investment News

Starbucks ups cost of packaged coffee, other products WSJ saysStarbucks is will increase prices for certain packaged coffee and other products in response to a spike in raw coffee expenses earlier this year that is now making its way to consumer wallets, according to The Wall Street Journal, citing comments from a company spokeswoman. J.M. Smucker (SJM) was the first large U.S, roaster to raise coffee prices when it announced a 9% price increase on its Folgers and Dunkin' Donuts (DNKN) packaged coffee. Kraft Foods (KRFT) followed their example a few days later with a 10% price increase on its Maxwell House and Yuban brands. Reference Link

Earnings Watch: Starbucks sees Q3 adjusted EPS 40c-41cStarbucks (SBUX) is scheduled to report third quarter results after the market close on Thursday, July 23, with a conference call scheduled for 5:00 pm ET. Starbucks purchases and roasts whole bean coffees and sells them, along with brewed coffees, Italian-style espresso beverages, cold blended beverages, food items, teas, and beverage-related accessories and equipment, primarily through company-operated retail stores. EXPECTATIONS: Analysts are looking for earnings per share of 41c on revenue of $4.86B, according to First Call. The consensus range for EPS is 40c-42c on revenue of $4.75B-$4.96B. In April, Starbucks forecast Q3 adjusted EPS of 40c-41c, Q4 adjusted EPS of 42c-43c, and backed its fiscal year 2015 adjusted EPS view of $1.55-$1.57, against estimates at that time for $1.57. The company also backed its FY15 revenue growth view of 16%-18%, with global comparable store sales growth of mid-single digits, consolidated tax rate of approximately 31% and capital expenditures of approximately $1.4B. LAST QUARTER: Starbucks reported second quarter EPS of 33c, in-line with analysts' estimates, on revenue of $4.6B, beating analysts' estimates of $4.53B. Starbucks said global comparable store sales increased 7%, with a 3% increase in traffic. Americas comp sales increased 7%, with a 2% increase in traffic; CAP comp sales increased 12%, driven by a 10% increase in traffic; EMEA comp sales increased 2%, driven by a 2% increase in traffic. NEWS: At May's Bernstein Annual Strategic Decisions Conference, Starbucks said mobile payments are exceeding expectations, and CEO Howard Schultz noted that "I'm not going anywhere." During the quarter, Starbucks announced plans to raise drink prices by 5c-20c and announced a music partnership with Spotify. The company said it will close all 23 La Boulange retail locations, as La Boulange stores "are not sustainable for the company's long-term growth." Starbucks Mobile Order & Pay, which began as a pilot in Portland in December 2014 and launched in the Pacific Northwest in March 2015, expanded to stores in 21 more states in the southern and central United States in June. Starbucks announced plans to join with over a dozen companies, including CVS Health (CVS), Microsoft (MSFT) and Wal-Mart (WMT), to hire 100,000 16-to-24-year-olds as part- and full-time employees, interns and apprentices by 2018. STREET RESEARCH: On the day after its last earnings report, UBS raised its price target on Starbucks shares to $57 from $48, calling it "best-in-class" due to strong momentum and promising pipeline of innovation across both product and strategic programs. BMO Capital said it expects the company to exceed expectations over the next several years, and it kept an Outperform rating on the shares. BTIG recently initiated Starbucks with a Buy rating and $64 target. PRICE ACTION: Ahead of Thursday afternoon's earnings report, shares are down 0.4% to $56.47.

Dunkin' Brands continues to see 410-440 net new Dunkin' Donuts U.S. restaurantsExpects Baskin-Robbins U.S. will add between 5-10 net new restaurants in FY15. Internationally, the company continues to target opening 200-300 net new restaurants across the two brands. It continues to expect net income of equity method investments to be approximately $13M.

Dunkin' Donuts plans for 26 new restaurants in Fresno and San FranciscoDunkin' Donuts announced the signing of multi-unit store development agreements with two franchise groups for a total commitment of 26 new restaurants in Fresno and San Francisco over the next several years. The two franchise groups and their development plans include: Existing franchisee Aharon Aminpour plans to develop 17 restaurants in Fresno and the surrounding cities including Clovis, Visalia and Tulare. Aminpour currently owns and operates one Dunkin' Donuts restaurant in Encino, and last November signed a development agreement for 10 new restaurants throughout the San Fernando Valley. His next restaurant under this new agreement is planned to open in 2017. New franchise group Shiva Developments, plan to develop nine new restaurants in San Francisco and the surrounding cities. Nick Bhatt currently owns one Dunkin' Donuts restaurant in Springfield, IL. The group's first restaurant in California is planned to open in 2017.

Dunkin' Brands downgraded to Underperform on valuation at CLSAAs previously reported, CLSA downgraded Dunkin' Brands to Underperform from Outperform. The firm downgraded shares based on full valuation and maintained its $56 price target on shares.